. 

April 11, 1989 

Honorable James M. Kuboviak Opinion No. JM-1039 

Brazes County Attorney 

300 East 26th Street Re: Distribution of tax funds 

Suite 325 remaining after dissolution 

Bryan, Texas 77803 of water control and improvement district, and related 

questions (RQ-1520) 

Dear Mr. Kuboviak: 

You have asked about the right of Brazos County to 

contract with a water control and improvement district to 

receive and use the surplus tax funds of the district 

remaining at the time of its dissolution if the county 

agrees to carry out certain of the district's functions 

after the dissolution. The water control and improvement 

district is located wholly within Brazos County. 

You explain: 

Brazes County Water Control and Improvement District No. 1, Big Creek, (hereinafter 

"Big Creek") was validated for organization 

and creation by Act on June 27, 1959, Chapter 

10, 1st C.S., .$ l-12, 1959 Tex. Gen. Laws 30, 

and under the legislative duties conferred 

thereby at Tex. Const., Art. XVI, 4 59. Several events now warrant dissolution of Big 

Creek. A federal district court order has 

enjoined Big Creek from completing any further construction of flood control improvements or of carrying out its statutory 

purposes until it has complied with the 

applicable provisions of the National Environmental Policy Act and the Environmental 

Quality Improvement Act by completing, in 

association with the Soil Conservation 

Service, a NEPA study of the water sheds 

within its boundaries. The district has 

found that the study and cost of the completion of improvements as necessitated by that 

study would be prohibitive. Prior to this 

P. 5385 
Honorable James M. Kuboviak - Page 2 (JM-1039) 

date, Big Creek, because of continuous court 

proceedings and litigation, has failed to 

complete the flood control and drainage 

structures within the ten (10) year time 

period from its date of creation as set forth 

in 5 51.793 of the Texas Water Code. 

The district must now contract with some 

government entity to maintain and repair the 

structures it has completed, it must contract 

to pay for such services and then it must 

dispose of its surplus tax funds upon its 

dissolution. 

. . . . 

It has been determined by Big Creek, that, 

even after contracting with the County, if 

the districts debts and obligations were 

satisfied upon its dissolution, including 

allowances for the maintenance of existing 

improvements until their retirement, a cash 

surplus would exist. 

We are advised that the Big Creek district has existed 

for approximately 30 years; that it issued bonds many years 

ago: that the issued bonds and other obligations have been 

retired or else previously collected tax money is available 

to retire all outstanding district obligations and anticipated expenses; and that approximately $30,000 will remain 

after such payments. It is also our understanding that the 

only "district functions" to be discharged following the 

dissolution of the district will be the maintenance of dams, 

for which Brazos County is willing to assume responsibility.1 

1. The opinion process of this office is designed to 

furnish legal opinions based upon a stated fact situation, 

and not to resolve fact disputes. A recitation of facts in 

an opinion is a not an affirmation of their accuracy, but 

merely a recital of the 

is offered. 

basis upon which the legal 

See senerallv Roteilo v. 

opinion 

Brazos Countv -Water 

Control & Imnrovement Dist. No. 1, 511 S.W.Zd 392 (Tex. Civ. 

APP. - Houston [lst Dist.], 1974, writ ref'd, n.r.e.) 

(historical background regarding the district). 

p. 5386 
Honorable James M. Kuboviak - Page 3 (JM-1039) 

Title 4 of the Texas Water Code governs districts, 

including the Big Creek District, created by the authority 

of article XVI, section 59, of the Texas Constitution. 

Water Code 5 50.001(l). The provisions of the title generally applicable to all such districts are found in chapter 

50 of the Water Code; those particularly concerning water 

control and improvement districts are contained in chapter 

51 thereof. 

Subchapter G of chapter 50 (applicable to all districts) deals generally with the dissolution of inactive 

districts. It provides that, after notice and hearing, the 

Texas Water Commission may dissolve any district which is 

inactive for a period of five consecutive years and has no 

outstanding bonded indebtedness. Water Code 5 50.251. Upon 

the dissolution of a district by the commission, the assets 

of the district escheat to the state. Id. 950.257. 

Water control and improvement districts may also be 

voluntarily dissolved pursuant to subchapter P of chapter 51 

of the Code (dealing particularly with water control and 

improvement districts). Different methods of doing so are 

authorized by subchapter P for several statutorily described 

situations. Section 51.781 of the Code provides: 

(a) If the electors of a district reject 

the proposal to issue construction bonds by a 

constitutional or statutory majority vote, 

the board must dissolve the district and 

liquidate the affairs of the district as 

provided in Sections 51.781-51.792 of this 

code. 

(b) Subject to the provisions of Subchapter G of Chapter 50 of this code, if a district finds at any time before the authorization of construction bonds or the final 

lending of its credit in another form that 

the proposed undertaking for any reason is 

impracticable or apparently cannot be successfully and beneficially accomplished, the 

board may issue notice of a hearing on proposal to dissolve the district. 

(c) Subject to the provisions of Subchapter G of Chapter 50 of this code, if 20 percent of the qualified voters of a district 

petition the board for a hearing on a proposal to dissolve the district and deposit with 

the board an amount estimated to cover the 

P. 5387 
Honorable James M. Kuboviak - Page 4 (JM-1039) 

actual cost of giving notice and holding the 

hearing, the board shall publish notice of 

the hearing within 10 days and shall hold the 

hearing within 40 days after the filing of 

the petition, as provided in Sections 

51.782-51.785 of this code. If the finding 

is against the petition, the deposit shall be 

applied to pay the cost of giving notice and 

holding the hearing. 

The mechanics of a dissolution effected pursuant to 

section 51.701 of the Water Code are controlled by sections 

51.782 through 51.792. Section 51.791 speaks to the disposition of excess taxes and reads: 

(a) If taxes have been collected by the 

dissolved district in excess of the amount 

required to liquidate the obligations of the 

district, the excess shall be paid ratably to 

the county treasurer or treasurers of the 

county or counties in which the district was 

located. 

(b) The commissioners courts shall credit 

the money received from the dissolved district to the interest and sinking fund for 

any outstanding county bonds. If the county 

has no outstanding bonds, the money may be 

applied as the commissioners court lawfully 

directs. 

However, the situation of the Big Creek district, as we 

understand it, does not meet strictly any of the three circumstances described in section 51.781 because bonds have 

not been rejected by voters, construction bonds have been 

authorized, and no voters have petitioned the board for a 

hearing on a proposal to dissolve the district or deposited 

funds to cover the costs of such a hearing. 

Subchapter P also authorizes dissolution in another 

circumstance. Section 51.793 reads: 

Subject to the provisions of Subchapter G 

of Chapter 50 of this code if a district has 

not within 10 years from the date of its 

creation commenced and completed the construction of a plant and improvements to 

carry out the purposes of its creation in 

accordance with the plans adopted by the 

district, the board may enter a resolution in 

p. 5388 
Honorable James M. Kuboviak - Page 5 (JM-1039) 

its minutes to dissolve the district under 

the provisions of Sections 51.794-51.828 of 

this code. After compliance with these 

provisions, a vote of the electors of the 

district, and the payment of its valid, 

enforceable indebtedness, the district may be 

dissolved. 

The mechanics of dissolution under section 51.793 provisions are much more elaborate, time consuming, and costly 

than are those required when dissolution his effected pursuant to section 51.781, but the Big Creek district apparently does meet the section 51.793 condition: it has not 

within 10 years from the date of its creation been able to 

carry out the purposes of its creation. The difficulty is 

that the subsequent sections governing the dissolution of 

districts under section 51.793 do not specify what is to 

become of excess taxes after the district is dissolved -- 

unlike the provision of section 51.791 applicable to section 

51.781 dissolutions. Furthermore, the provisions governing 

dissolutions under section 51.793 appear to assume that 

outstanding obligations will remain unpaid and unprovided 

for, and that an election approving additional tax bonds 

("dissolution bonds") will be necessary to effect a dissolution.2 

2. It is after the issuance, sale or delivery of needed 

dissolution bonds that a dissolution under section 51.793 is 

deemed to have been effected. Section 51.828 states: 

(a) On the issuance and sale or delivery of the 

dissolution bonds and the appointment and qualification 

of the trustee, the secretary shall deposit all available existing records of the district in the office of 

the county clerk of the county or one of the counties 

in which the district is located. 

(b) The district immediately is considered dissolved for all purposes, except that the taxes levied 

against the taxable property may be enforced in the 

name of the district on behalf of the bondholders by 

the trustee or his successors. The surviving board may 

meet from time to time until the dissolution bonds are 

paid and discharged and may delegate its powers and 

give instructions to the trustee or his successors as 

the board sees fit and circumstances warrant. After 

(Footnote Continued) 

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Honorable James M. Kuboviak - Page 6 (J&1039) 

There is a third avenue for dissolution or abolition of 

water control and improvement districts provided by subchapter P, but it is available only to districts located entirely in a county having a population of less than 11,000 according to the last preceding federal census. See Water 

Code § 51.829. Brazos County, according to the 1980 census, 

has a population of more than 90,000, so the third alternative procedure is not available to it. Cf. Am 

lin County Water Dist., 432 S.W.2d 520 (Tex. 1968) (eligibility). Of interest, nevertheless, in the sections describing its mechanism, is section 51.836, which reads: 

If a district has outstanding bonds or 

other indebtedness maturing beyond the current year in which the dissolution occurs, 

the commissioners court of the county in 

which the district is located shall levy and 

have assessed and collected, in the manner 

prescribed in the Property Tax Code sufficient taxes on all taxable property in the 

district to pay the principal of and interest 

on the bonds and other indebtedness when due. 

Until 1929, there was no provision in Texas law for the 

dissolution of a water control and improvement district. In 

that year, the substance of section 51.781 and its related 

provisions was enacted, and also the alternative procedure 

available under section 51.829. m Acts 1929, 41st Leg., 

ch. 87, at 204; ch. 280, at 578. The source law for section 

51.793 and the procedure it authorizes was enacted in 1943. 

m Acts 1943, 48th Leg., ch. 328, at 550. That act provided, inter alia: 

Sec. 18. This Act shall be cumulative of 

all other provisions of law providing for the 

dissolution of water control and improvement 

districts organized under the provisions of 

Sections 59-a of Article XVI of the Constitution of Texas, and shall be applicable only 

to such districts as may adopt the provisions 

hereof as provided . . . . 

We are of the opinion that the intent of the 1943 act 

regarding a method for disposing of excess taxes is implied 

(Footnote Continued) 

the payment of all dissolution bonds, interest, and 

costs of collection, the board shall be dissolved. 

p. 5390 
Honorable James M. Kuboviak - Page 7 (JM-1039) 

by its proclamation that its provisions are cumulative of 

all other provisions of law providing for the dissolution of 

water control and improvement districts. While such a statutory provision does not consolidate laws in d materia, 

it does indicate an intent that they be considered to be in 

harmonious co-existence and cooperation. State v. Laredo 

Ice Co., 73 S.W. 951, 952 (Tex. 1903). The substance of 

both the provision now found in section 51.791 that excess 

taxes be paid to the county treasurer and the provision of 

section 51.836 that authorizes the county to retire the 

obligations of a dissolved district were already part of the 

law providing for the dissolution of such districts at the 

time of the 1943 enactment. 

Section 51.802 of the Water Code (one of the sections 

supplementing the section 51.793 authorization for dissolution) specifically allows the board of the district to "contract with trustees, engineers, attorneys, and others it 

considers necessary or desirable to properly liquidate and 

wind up the affairs of the district," and we believe it may 

contract with the county to accept and maintain the district 

facilities in exchange for the district's excess tax monies 

remaining after its dissolution. In doing so, it will be 

conforming to the policy of the Water Code as exemplified by 

section 51.791. See also Water Code 5 52.501 (dissolution 

of underground water conservation districts): id. 5 66.403 

(dissolution of storm control districts). See senerallv 

Water Code 55 58.781-58.836 (irrigation districts). .Cf. 

Trimmer v. Carlton, 296 S.W. 1070 (Tex. 1927) (& materla, 

same purpose). 

Aside from whatever the statutory duty of the county 

may be upon the dissolution of a water district located 

within its boundaries, if, in the reasonable opinion of the 

county commissioners court, the proposed contract is supported by adequate consideration flowing to the county, we 

believe that Brazos County may legally contract with Brazos 

County Water Control and Improvement District No. 1 to 

continue and carry out district functions after the dissolution of the district and, as consideration therefor, to 

receive the surplus tax funds of the district upon dissolution of the district. Section 411.002 of the Local Government Code reads: 

(a) The commissioners court of a county 

may contract with a governmental unit, including a county, municipality, or other political subdivision, to jointly acquire a 

right-of-way or to jointly construct or maintain a canal, drain, levee, or other 

p. 5391 
Honorable James M. Kuboviak - Page 8 (JM-1039) 

improvement for the purpose of providing 

flood control or drainage as it relates to 

flood control or for the purpose of providing 

and maintaining necessary outlets. 

(b) The contract may contain any provisions that the governing bodies of the contracting entities consider necessary. 

(c) The contracting entities may provide 

by contract, on mutually agreeable terms, 

that they shall jointly maintain the project 

or that one of them shall maintain the project under its exclusive direction and control while the other entity contributes to 

the expense of maintenance. 

See also V.T.C.S. art. 4413(32c) (Interlocal Cooperation 

Act); Wi ; lac 

1 v. Abendroth, 177 S.W.2d 936 (Tex. 1944)(classification of 

districts). Cf. Attorney General Opinion MW-257 (1980) (related duties of county). 

Brazos County may contract with Brazos 

County Water Control Improvement District 

No. 1 to continue and carry out district 

functions after the dissolution of the 

district and to receive the surplus tax funds 

of the district upon dissolution of the 

district. 

(zl$$+ 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

p. 5392 
Honorable James.M. Kuboviak - Page 9 (JM-1039) 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Bruce Youngblood 

Assistant Attorney General 

p. 5393